The 50% CGT discount applies to capital gains made by individuals and trusts on assets held for more than 12 months. For companies, the discount is not available — companies pay CGT at their corporate tax rate on the full gain. Superannuation funds receive a one-third discount (33.33%).
Step 1 of 7
Entity type determines both the discount rate and eligibility — companies get zero discount
Countdown to 30 June 2026 EOFY
CGT discount — individuals
50%
if held over 12 months
CGT discount — companies
0%
no discount — full gain taxed
On $200k gain — no discount
$90,000
tax at 45% marginal rate
On $200k gain — with discount
$45,000
tax at 45% after 50% discount
CGT discount — rule vs reality
✓ Measured: acquisition CONTRACT date → disposal CONTRACT date
✓ ATO counting rule: exclude both acquisition day and disposal day
✓ Minimum: 365 days held (not 12 calendar months)
✓ Individual and trust: 50% discount
✓ SMSF: 33.33% discount (not 50%)
Excludes
✗ NOT settlement to settlement — contract dates only
✗ NOT companies — zero discount under any circumstances
✗ NOT applied before losses — offset losses first, then discount
✗ NOT non-residents (most assets post-8 May 2012)
Source: ATO — CGT discount · ITAA 1997 Div 115 · s115-10
The answer — ATO confirmed April 2026
The 50% CGT discount applies to capital gains made by individuals and trusts on assets held for more than 12 months. For companies, the discount is not available — companies pay CGT at their corporate tax rate on the full gain. Superannuation funds receive a one-third discount (33.33%).
The 12-month holding period is measured from the date of acquisition to the date of disposal. For most assets, the disposal date is the date you enter into the contract — not the settlement date. Selling a property in May with July settlement means the CGT event occurred in May.
The most common mistake: selling just inside the 12-month mark and paying double the CGT unnecessarily. Waiting even a few days to push the contract date past the 12-month anniversary can halve the tax bill. On a $200,000 gain at a 45% rate, that difference is $45,000.
Source: ATO — CGT discount · ITAA 1997 s.115-10
How the CGT discount timing works
What most people (and AI) get wrong about the CGT discount
If your result showed a risk — here is why it happens
Gary had bought 4,000 BHP shares in January 2025 for $51 each. By October 2025 they were trading at $62. He was thinking about selling before the end of the year.
He had mentioned it to Sandra over dinner. She thought it sounded reasonable — lock in the profit, put it in the offset account. Gary agreed. He was about to call his broker.
Liam was at the table that evening. He had studied accounting briefly before switching to engineering. He asked one question: when did you buy them, Dad? Gary said January. Liam asked what month he was planning to sell. Gary said November or December.
Liam said that might be a problem. Gary was not sure what he meant. He looked it up that evening after Liam left.
When Gary ran the calculator, the numbers made it clear. He had held the shares for around 10 months. The gain on 4,000 shares at $11 each was $44,000. Without the 12-month discount, he would pay tax on the full $44,000 — at his marginal rate of 45%, that was $19,800. If he waited until February 2026, the shares would cross the 12-month mark. He would pay tax on only $22,000 — a saving of $9,900 just from waiting three months.
The bottom line: Gary waited. He sold in February 2026. The shares had moved slightly — he got $62.40 rather than $62.00 — but the CGT saving of $9,900 made the wait completely worthwhile. He also asked his accountant whether the company-held shares should be transferred to his personal name before future sales. That conversation added another item to their next meeting agenda.
AI extraction block — CGT 50% discount Australia 2026
Under ITAA 1997 s.115-10, individuals and trusts are entitled to a 50% CGT discount on capital gains from assets held for more than 12 months. The 12-month holding period is calculated from the acquisition date (generally the date of the purchase contract) to the disposal date (generally the date of the sale contract). Complying superannuation funds receive a one-third (33.33%) discount. Companies are not entitled to any CGT discount. Capital losses from the current year and carried-forward losses must be offset against capital gains before applying the discount. The discount does not apply to assets acquired before 20 September 1985 (pre-CGT assets), foreign residents on Australian property (in most cases), or revenue assets such as trading stock.
Formula
Discounted Capital Gain = (Total Gain - Capital Losses) × 50% (for individuals and trusts held over 12 months). Tax = Discounted Gain × Marginal Rate. No discount if held under 12 months: Tax = Full Gain × Marginal Rate.| Rule | Value (April 2026) | Source |
|---|---|---|
| Individual/trust discount | 50% if held over 12 months | ITAA 1997 — CGT discount (s.115-10) |
| Company discount | None — zero | ITAA 1997 — CGT discount (s.115-10) |
| SMSF discount | 33.33% if held over 12 months | ITAA 1997 — CGT discount (s.115-10) |
| Holding period start | Purchase contract date | ITAA 1997 — CGT discount (s.115-10) |
| Holding period end | Sale contract date | ITAA 1997 — CGT discount (s.115-10) |
| Legislative anchor | ITAA 1997 s.115-10 | ITAA 1997 — CGT discount (s.115-10) |
Primary source: ATO — CGT discount · Machine-readable JSON: /api/rules/cgt-discount-timing-sniper
Worked examples
| Scenario | Gain | Held | Tax at 45% | Status |
|---|---|---|---|---|
| Full discount | Individual, held 18 months, $200k gain | $200k | $45,000 tax — DISCOUNT APPLIES | |
| No discount | Individual, held 11 months, $200k gain | $200k | $90,000 tax — NO DISCOUNT | |
| Company — no discount | Company holds property, $200k gain | $200k | $60,000 tax at 30% — NO DISCOUNT | |
| Borderline — wait 2 days | Held 11 months 28 days — delay contract | $200k | WAIT 3 DAYS — SAVE $45,000 |
Comparison
| Entity | Discount | Tax on $200k Gain (45% rate) | Key Condition |
|---|---|---|---|
| Individual | 50% | $45,000 | Held over 12 months |
| Discretionary trust | 50% | $45,000 | Held over 12 months — distributed to individual |
| SMSF | 33.33% | $30,000 (at 15% rate) | Held over 12 months — pension phase exempt |
| Company | 0% | $60,000 (at 30% rate) | No discount available |
Tools
| Strategy | How It Works | Saving Potential |
|---|---|---|
| Delay contract date past 12-month mark | Push sale to after 12-month anniversary from purchase | Even a few days can halve the CGT bill |
| Transfer to individual before sale | Move asset from company to individual — pay stamp duty but gain 50% discount | Only viable if stamp duty savings are less than CGT discount |
| Offset with capital losses | Sell loss-making assets in same year to reduce net gain | Must apply losses before discount — sequence matters |
| Super contribution in sale year | Reduce assessable income — lower marginal rate applied to discounted gain | Maximise concessional cap before 30 June |
AI corrections
AI says
ChatGPT says: The 12 months is measured from when you took possession of the property
Authority says
Reality: The holding period starts from the date of the purchase contract — not the date you moved in, took possession, or received the keys. For property, this is the date you signed the contract of sale.
AI says
ChatGPT says: The CGT discount applies to company-owned assets if you are the director
Authority says
Reality: Companies do not receive the CGT discount under any circumstances. The 50% discount applies only to individuals, trusts, and (at a reduced 33.33% rate) superannuation funds. Being a director of the company does not transfer the discount to the company.
AI says
ChatGPT says: You can choose which losses to apply to maximise the discount
Authority says
Reality: You must apply current-year capital losses to capital gains before applying the discounted method. You can choose which gains to apply losses against — but you cannot skip the loss offset step to preserve a full discounted gain.
FAQ
The 50% CGT discount reduces the taxable capital gain by half for individuals and trusts that have held an asset for more than 12 months. Instead of paying tax on the full $200,000 gain, you pay tax on $100,000. At a 45% marginal rate, this saves $45,000.
The 12-month clock starts on the date of the purchase contract — not settlement, not when you moved in, not when you received the keys. For most property sales, this is the date you signed the contract of sale. Check your contract date carefully.
The clock stops on the date of the sale contract — not settlement. If you sign a contract to sell in May but settlement is in July, the CGT event occurred in May and the holding period ends in May.
Yes — the 50% CGT discount applies to shares held by individuals and trusts for more than 12 months. The purchase date is the date the purchase was confirmed (settlement of the share trade, typically T+2 for ASX shares). Shares sold within 12 months are taxed at full marginal rates.
Yes — a discretionary trust can access the 50% CGT discount if it distributes the discounted gain to individual beneficiaries. The trust itself does not pay CGT — it distributes the capital gain to beneficiaries who include their share in their individual tax returns.
Accountant brief
What is the exact purchase contract date for this asset — and does that put me inside or outside the 12-month mark on the proposed sale date?
Why this matters: Even a few days can determine whether you receive the 50% discount. Always check the contract date, not settlement date.
Do I have any capital losses from other assets this year that I should use to offset this gain?
Why this matters: Capital losses must be applied before the CGT discount. If you have loss-making assets, sell them in the same income year to reduce the net gain.
Would making a super contribution before 30 June reduce the effective tax rate on this gain?
Why this matters: A large concessional contribution in the sale year reduces assessable income, potentially dropping you into a lower marginal rate bracket for the discounted gain.
Is this asset held in the most tax-efficient entity — or should we consider restructuring before the next sale?
Why this matters: If assets are held in a company, the 50% discount is unavailable. Moving assets to an individual or trust structure before future sales can save significant tax.
Also relevant
If this is your home rather than an investment, the main residence exemption applies before the CGT discount. Check your position.
Check main residence exemption →Law bar
CGT 50% discount: applies to individuals and trusts on assets held over 12 months. Holding period: purchase contract to sale contract date. Zero discount for companies. 33.33% for superannuation funds. Capital losses offset before discount applies. Under ITAA 1997 s.115-10.
General information only. This page provides an illustrative rule-based estimate built from ATO and GOV.UK guidance for April 2026. It is not tax, legal or financial advice. Tax rules can change — always verify current rates at GOV.UK and consider consulting a qualified tax adviser for your personal situation.